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On March 6th, in the UK's Spring Budget, Chancellor Jeremy Hunt announced that “the government is introducing a new duty on vaping and increasing tobacco duty from October 2026, raising revenue to support public services like the NHS.” This will maintain the current financial incentive to choose vaping over smoking.
According to forecasts, the UK excise tax on vaping will raise £120 million in 2026-2027, rising to £445 million by 2028-2029. Additionally, tobacco duty will raise a further £110 million in 2026-7 and £170 million in 2027-2028 and 2028-2029.
Vaping excise duty
A 12-week discussion on policy design and technical details has started. Registrations for the vaping duty will open on 1 April 2026.
The rates will be:
· £1.00 per 10ml for nicotine free liquids
· £2.00 per 10ml on liquids that contain 0.1-10.9 mg nicotine per ml
· £3.00 per 10ml on liquids that contain 11mg or more per ml
Tobacco tax changes
The government is increasing the tax on tobacco by £2.00 for every 100 cigarettes or 50 grams of tobacco. This change will take effect on October 1, 2026.
At the beginning of each year, it's often the prime moment to analyze government policy adjustments. This time is crucial because countries are exploring ways to increase revenue through tax changes. These changes will have an impact on various industries.
Lawmakers can change proposed tax adjustments during budget discussions, which happen throughout the year in a complex legislative process. Hence, it's imperative to recognize that the proposed measures may undergo substantial changes prior to implementation. Therefore, industry practitioners must remain vigilant, staying abreast of the latest developments in relevant regulations.
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Vape taxes in European countries
Currently, the EU does not uniformly mandate member states to levy a consumption vape tax. However, many member states have included e-liquid in their consumption tax categories, with taxation based on the volume of e-liquid. Over half of the 27 EU member nations have implemented vape taxes.
Bulgaria
In December 2022, Parliament approved an amendment of the Law on Excise and Tax Warehouses to introduce excise duty and tax stamps for nicotine-containing e-cigarettes. It includes nicotine-containing e-cigarettes in the category of tobacco products for tax purposes, and requires manufacturers and importers of nicotine vapour products to obtain permits to trade in tobacco products and a tax warehouse licence.
The excise tax came into force on 1st March 2023 at BGN0.18 (approximately €0.092) per ml in 2023, and it will rise to BGN0.25 (approximately €0.13) in 2024 and BGN0.35 (approximately €0.18) in 2025. Tax stamps would be mandatory from 31st December 2023.
Denmark
Act 2616/2021 imposes excise duty on nicotine-containing e-liquids. E-liquids with nicotine of up to 12 mg/ml are taxed at DKK1.50 (approximately €0.20) per ml, while those with nicotine above 12 mg/ml will be taxed at DKK2.5 (approximately €0.34) per ml. They do not levy tax on zero-nicotine e-liquids.
Tax stamps are obligatory and their cost is determined based on the nicotine concentration in the e-liquid, as verified by the Customs Authority. The form for requesting these stamps is available on the authority's website and can be accessed by companies that have already registered.
Finland
The Tobacco Tax Act imposes an excise tax on e-liquids (with or without nicotine) of €0.30 per ml. This tax rate has remained steady since its introduction on 1st January 2017.
We believe the tax on these products could change. This might happen if they are included in the new European Commission proposal. The proposal aims to update the 2011/64/EC directive on tobacco taxes.
Germany
The Tobacco Tax Act set a €0.20 per ml excise tax for e-liquids with or without nicotine. The rate will increase to €0.26 from 1st January 2025 and €0.32 from 1st January 2026.
Italy
Every two weeks, the operator of a tax warehouse must inform the ADM about the products dispatched and their corresponding tax. The tax is calculated every 15 days based on the total quantity of liquid sold in ml multiplied by the tax rate for nicotine-containing or nicotine-free liquid. It is paid to the tax office using the F24 excise form.
· Nicotine-containing liquids are subject to 15% of the excise duty levied on the equivalent quantity of cigarettes
· Nicotine-free liquids are subject to 10% of the excise duty levied on the equivalent quantity of cigarettes
The formula used to calculate tax for e-liquid would be:
Rate = (tax per cigarette unit x equivalence*) x 85%/90% discount
*1 ml of e-liquid is considered equivalent to 5.63 cigarettes.
Example:
· Nicotine e-liquids: tax per ml = €0.132333 = (15548×5.63) x 0.15
· Nicotine-free e-liquids: tax per ml = €0.088222 = (15548×5.63) x 0.10
Montenegro
The Republic of Montenegro has amended its excise tax to include e-liquids. According to the Excise Tax Act, a rate of €0.90 per ml applies to all e-liquids, with or without nicotine.
Article 49b of the excise law states that e-liquids are meant to be inhaled as vapor without burning. They are used as a tobacco substitute for e-cigarettes, whether they contain nicotine or not.
Norway
The excise tax for nicotine-containing e-cigarettes for 2024 amounts to NOK5.11 (approximately €0.45) per ml. However, the excise tax will only be applicable when Norway implements the EU Tobacco Products Directive (TPD), legalizing nicotine-containing e-cigarettes, which is expected to occur in 2024.
Poland
Polish lawmakers decided in November 2019 to amend the Excise Tax Act and set the tax rate on all e-liquids regardless of nicotine presence at PLN0.55 (approximately €0.13) per ml, which came into force on 1st October 2020.
In 2020, Poland imposed an excise tax stamp for e-liquids.
Products placed on the market before the 1st of January need to carry a “legalization stamp", costing PLN5 (approximately €1.10) per stamp. On 1st May 2021, the temporary grace period, which exempted these products from this requirement, ended.
Products placed on the Polish market after 1st January 2021 are required to carry the stamp.
According to a Ministry of Finance regulation, non-adhesive tax stamps can also now be used for e-liquids. This decision was taken due to a shortage of glue and the high demand FOR the only company able to produce the excise stamps.
The two types of stamps are:
Adhesive stamps: the stamps are bought in packages of 1,000 units at a cost of PLN47.84 (approximately €10.25) per package, meaning that each stamp costs around PLN0.047 (approximately €0.01)
Non-adhesive stamps: these can be acquired at a lower price of PLN21.09 (approximately €4.50) for 1,000 units, meaning that each stamp costs around PLN0.021 (approximately €0.0042).
Imported products must also carry a specific stamp. This stamp can also be adhesive or non-adhesive. The fees are the same as indicated above.
The Ministry of Finance publishes a guide on the taxation of e-liquids every year.
Portugal
As of 1st January 2024,nicotine-free e-liquids are taxed at €0.175 per ml and nicotine-containing e-liquids are taxedat €0.351 per ml.
Tax authorities reported that the revenue from e-liquid taxes in 2022 amounted to €2.7m.
Products subjected to tobacco tax, including nicotine-containing e-liquids, need to carry an excise stamp. The stamp for the 2023 financial year must be a magenta (pinkish-purple) color, and the unit price is:
· €0.00472 for the non-adhesive version
· €0.03327 for the adhesive version
Sweden
Two different tax rates apply to nicotine-containing e-liquids. The current excise duty, which came into force on 1st July 2018, was imposed by Law 2018:696 on excise duties for nicotine-containing products, published in the Swedish Code of Statues along with an implementing regulation (2018:704).
As of 1st January 2021, a definition for highly concentrated e-liquids is introduced in the law on tax for certain nicotine-containing products. Highly concentrated e-liquids are e-liquids with a concentration of nicotine that amounts to a minimum of 15 mg/ml and a maximum of 20 mg/ml. Highly concentrated e-liquids are taxed at a rate of SEK4,000 (approximately €367) per l while nicotine-containing e-liquids with a nicotine concentration up to 15 mg/ml are taxed at a rate of SEK2,000 (approximately €184) per l.
A tax exemption applies for goods brought into the country by an individual if they are intended for personal use, up to a maximum of 20 ml of e-liquid per person per occasion.
Ukraine
The Law On Customs Tariffs imposes import duty on e-liquids with and without nicotine contained in cartridges, refill containers and other containers in the form of an ad valorem tax rate of 3% per l.
The State Tax Service of Ukraine reported that under the amendments to the Tax Code of Ukraine, as of 1st January 2023, the excise tax for e-liquids with and without nicotine is set at a rate of UAH10,000 (approximately €248) per l. The rate will be valid during the state of martial law or emergency.
The State Tax Service reported that e-liquids with and without nicotine are required to have excise stamps by the Regulation on Excise Stamps. The cost of one stamp has increased from UAH0.091 (approximately €0.0022) to UAH0.1643 (approximately €0.0041), starting from 12th April 2023.
Bill 8286 introducing electronic excise stamps and enabling traceability of vapour products passed its first reading in January 2023 and is awaiting its second reading. If adopted, it would enter into force on 1st January 2024.
Learn more
Vape taxes in European countries
References
ASH comment on Budget decisions on tobacco and vaping
Hangsen International Group
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Feel free to Contact us at service@hangsen.com or leave a message on our Contact page.
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